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Rating Summary:
10 Buy, 16 Hold, 11 Sell
Rating Trend: = Flat
Today’s Overall Ratings:
Up: 20 | Down: 19 | New: 15
Taking the other side of the trade, Albert Fried & Company initiates formal coverage on Netflix (NASDAQ: NFLX) with a Underweight rating and $68 price target, suggesting 30% downside.
The firm comments, “Who doesn’t love a Cinderella Story but we think equity comebacks are rare -the fundamental forces such as technology, rising costs, and increased competition have no emotions and rarely if ever abate. We initiate research coverage of NFLX shares as we introduce our earnings estimates and $68 Target We Drop Coverage of NFLX shares on a trading basis which was based on our balance sheet concerns alone while our concerns remain; we think there are sufficient valuation concerns to warrant First Call equity coverage.”
The firm also noted they expect the current SEC investigation regarding NFLX’s Face Book posts to expand. On the social sharing, they said while an interesting feature, if Face Book users do not access a shared experience, they think Movie shares could be as popular as spam.
They also think recent rally based on I) the Disney Deal II) M&A hopes and III) Short profit taking prior to an increase in expected capital gains tax rates could be setting up speculators yet again. “We think a Reflexive Speculative bubble has developed in NFLX shares.:
On a potential takeover, the firm said NFLX’s $7 billion in content exposure is a poison pill to any premium bid.
NOTE: Shares of NFLX were upgraded at Janney to Buy earlier.
For an analyst ratings summary and ratings history on Netflix click here. For more ratings news on Netflix click here.
Shares of Netflix closed at $97.70 yesterday, with a 52 week range of $52.81-$133.43.
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